Have you ever wondered why realtors and investors tend to not get along?
Realtors and some distressed homeowners perceive investors as vultures and ambulance chasers. As with any profession there are some "bad eggs" that may warrant this label. For the most part, real estate investors provide a valuable service to those who are in a bad situation.
The MAIN reason a homeowner is willing to create a trust and deed the property into the trust (with the investor as trustee, thereby giving him control to act as an owner) is for the peace of mind. These people are going through an extremely difficult period in their life and they DON'T WANT to deal with Realtors (whom they perceive as salesman) or any kind of decision making other than "get-me-out-of-this-mess!" They want to hand the situation over to someone who will take care of all the details and decisions and a Realtor is not in a position to do that.
Friday, January 23, 2009
Thursday, January 22, 2009
The Lowdown on Loan Modification Programs
According to the government's Office of the Comptroller of the Currency, loan modification plans are getting nowhere fast. The number of loans modified in the first quarter that were 30 or more days delinquent was 37 percent after three months and 55 percent after six months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19 percent at three months and nearly 37 percent after six months.
Comptroller of the Currency John C. Dugan stated that re-default rates increased each month, whether measured using 30-day or 60-day delinquencies, and showed no signs of leveling off after six months and even eight months.
Modified mortgages during the first half of 2008 were structured for about 200,000 borrowers who were falling behind on their payments. Unfortunately, most of those homeowners missed at least one payment after the loan modification which means that they're once again on the road to losing their homes to foreclosure.
Doing a modified refinance is one of the best ways to rescue those who are underwater on their mortgages, particularly if they can switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan. But too many mortgages are encumbered by home equity loans or other second mortgages. And before considering loan modifications on primary mortgages, investors holding liens on smaller secondary loans must agree. Many do not, because a modified refinance costs them too much money.
The FDIC launched a program for the seriously delinquent customers of IndyMac (which is now under its control). The program seems to be working for those who are participating, but the problem is that so few actually qualify for the loan modifications (only about 10 or 12 percent). Admittedly, some homeowners haven't responded to offers for loan modification, but many who did don't meet the necessary criteria.
The $300 billion foreclosure prevention program managed by HUD and the FHA is supposed to help about half a million homeowners, but so far, it's only managed to save less than 300 borrowers across the entire country. The program is in the process of being revised; hopefully into a more effective incarnation than the last.
What's a homeowner to do?
* see ABC News report on the challenges of loan modification: http://abcnews.go.com/Blotter/story?id=6702731&page=1
Comptroller of the Currency John C. Dugan stated that re-default rates increased each month, whether measured using 30-day or 60-day delinquencies, and showed no signs of leveling off after six months and even eight months.
Modified mortgages during the first half of 2008 were structured for about 200,000 borrowers who were falling behind on their payments. Unfortunately, most of those homeowners missed at least one payment after the loan modification which means that they're once again on the road to losing their homes to foreclosure.
Doing a modified refinance is one of the best ways to rescue those who are underwater on their mortgages, particularly if they can switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan. But too many mortgages are encumbered by home equity loans or other second mortgages. And before considering loan modifications on primary mortgages, investors holding liens on smaller secondary loans must agree. Many do not, because a modified refinance costs them too much money.
The FDIC launched a program for the seriously delinquent customers of IndyMac (which is now under its control). The program seems to be working for those who are participating, but the problem is that so few actually qualify for the loan modifications (only about 10 or 12 percent). Admittedly, some homeowners haven't responded to offers for loan modification, but many who did don't meet the necessary criteria.
The $300 billion foreclosure prevention program managed by HUD and the FHA is supposed to help about half a million homeowners, but so far, it's only managed to save less than 300 borrowers across the entire country. The program is in the process of being revised; hopefully into a more effective incarnation than the last.
What's a homeowner to do?
* see ABC News report on the challenges of loan modification: http://abcnews.go.com/Blotter/story?id=6702731&page=1
Friday, January 16, 2009
Newspaper Advertising, a Thing of the Past?
In the last week I have heard the same "advice" from two completely different sources: "No one is reading newspaper ads anymore. Target your audience where it's at - online. "
Are you thinking, "people don't buy a house online!" "Am I really missing out on potential clients by not having a solid presence on the web?" You betcha. Statistics from the National Association of Realtors show that over 80% of home buyers use the internet as their primary research tool. And you have heard that the LA Times has dropped the real estate section, right?
Now I'm no statistician, but I think it's safe to say that even on a local scale, you can reach more people online. Here are some other interesting numbers... In 2008, $23.6 billion (yes, with a "b") was spent on internet ads. Of that amount almost $1 billion went into online video. In fact, online video ad spending grew faster than search spending. What does all this mean? It means we need to change our thinking when it comes to building relationships with potential and existing clients.
For example:
Are you thinking, "people don't buy a house online!" "Am I really missing out on potential clients by not having a solid presence on the web?" You betcha. Statistics from the National Association of Realtors show that over 80% of home buyers use the internet as their primary research tool. And you have heard that the LA Times has dropped the real estate section, right?
Now I'm no statistician, but I think it's safe to say that even on a local scale, you can reach more people online. Here are some other interesting numbers... In 2008, $23.6 billion (yes, with a "b") was spent on internet ads. Of that amount almost $1 billion went into online video. In fact, online video ad spending grew faster than search spending. What does all this mean? It means we need to change our thinking when it comes to building relationships with potential and existing clients.
For example:
- host a live online event where buyers can ask questions and get answers in real time from you
- deliver free real estate news in the form of a brief video news bulletin
- offer how-to videos for both buyers and sellers to guide them through the process of buying and selling a home.
Sunday, January 11, 2009
Small Improvements that Payoff Big
These days you want to do whatever it takes to make your house appealing. While curb appeal is important, ultimately you want your home's future owner to see themselves living in it as their home. Your goal is to make the home look inviting and full of potential inside and out.
Here are some quick ways to add value with minimal expense.
1. Get rid of clutter! Give each room a definite purpose.
2. Add landscape lighting to your walkways.
3. Update hardware and light fixtures throughout the house to give it a bright and harmonious feel.
4. A fresh coat of paint. (A standard suggestion because it really makes a BIG difference!)
5. Consider replacing carpet with hardwood flooring. Hardwood floors are easier to clean, feel more spacious, and the cost is about the same as carpet.
Once you've got your home in tiptop shape, the next step is to get it seen. There will be articles to come on how to do just that.
- Maximize your Real Estate Depreciation Deduction
Here are some quick ways to add value with minimal expense.
1. Get rid of clutter! Give each room a definite purpose.
2. Add landscape lighting to your walkways.
3. Update hardware and light fixtures throughout the house to give it a bright and harmonious feel.
4. A fresh coat of paint. (A standard suggestion because it really makes a BIG difference!)
5. Consider replacing carpet with hardwood flooring. Hardwood floors are easier to clean, feel more spacious, and the cost is about the same as carpet.
Once you've got your home in tiptop shape, the next step is to get it seen. There will be articles to come on how to do just that.
- Maximize your Real Estate Depreciation Deduction
Wednesday, January 7, 2009
What Lies Ahead?
Reading over the latest Utah headlines it's obvious that although we have been somewhat sheltered from the overall economic climate, we are not unaffected. According to the Utah Department of Workforce Services, although Utah has led the nation in employment growth in the past, "from Oct to Nov 2008 alone, the statewide job-loss rate accelerated from 0.4 percent to 0.9 percent, a difference of more than 6,000 jobs." - Standard-Examiner.
After all is said and done, it is quite obvious that a fair portion of the current climate is based on fear. On top of real issues, the fear that has been induced by all the constant media gloom and doom coverage of the subject is adding to the crisis. Consumers are holding back from making that "big purchase" out of fear which affects businesses and adds to the overall slump we are experiencing.
"We've swung from one extreme to the other," states Rees Petersen, vice president and regional investment manager of Wells Fargo's private bank division, "from being a culture that uses debt to being debt averse. And that's a dangerous reaction because not all debt is bad. The government has been good at addressing fiscal policies but they also need to address the fear that consumers and investors now have." - The Daily Herald.
Are we through the worst of this crisis in Utah? Or merely experiencing a delayed reaction? With job growth stagnating it will be a while before the excess inventory of housing is absorbed. What are your thoughts?
Sources:
http://www.standard.net/live/news/160660
http://www.heraldextra.com/content/view/294903/18/
After all is said and done, it is quite obvious that a fair portion of the current climate is based on fear. On top of real issues, the fear that has been induced by all the constant media gloom and doom coverage of the subject is adding to the crisis. Consumers are holding back from making that "big purchase" out of fear which affects businesses and adds to the overall slump we are experiencing.
"We've swung from one extreme to the other," states Rees Petersen, vice president and regional investment manager of Wells Fargo's private bank division, "from being a culture that uses debt to being debt averse. And that's a dangerous reaction because not all debt is bad. The government has been good at addressing fiscal policies but they also need to address the fear that consumers and investors now have." - The Daily Herald.
Are we through the worst of this crisis in Utah? Or merely experiencing a delayed reaction? With job growth stagnating it will be a while before the excess inventory of housing is absorbed. What are your thoughts?
Sources:
http://www.standard.net/live/news/160660
http://www.heraldextra.com/content/view/294903/18/
Friday, January 2, 2009
Welcome 2009!
A new calendar marks the entrance of a new year. But it's more than that. This is a mile marker on life's highway.
Let's make 2009 a year of opportunity by taking advantage of the current economic environment and putting our creativity and initiative to work like never before.
Every day we wake up, it's a new day. Live in the moment. Be in the moment. Follow your heart and your dream. Only look forward and see your goal coming closer and closer as you near it with every step you take.
- Popular Tax Saving Tips
Let's make 2009 a year of opportunity by taking advantage of the current economic environment and putting our creativity and initiative to work like never before.
Every day we wake up, it's a new day. Live in the moment. Be in the moment. Follow your heart and your dream. Only look forward and see your goal coming closer and closer as you near it with every step you take.
- Popular Tax Saving Tips
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